Bankruptcy Blog

Changes to the Bankruptcy Act

Changes to the Bankruptcy Act

This article was originally added: 25-08-2009

The Federal Government is poised to introduce new sweeping changes and reform to the Bankruptcy Act. The changes reflect that debtors declare bankruptcy more as a result of “misfortune” than “misdeed”.

Amongst the changes, a creditor wishing to raise a petition to force a debtor into bankruptcy can now only do so if their provable debt is greater than $10000.

According to Attorney –General Robert McClelland, the changes represent a different approach to how debtors have been addressed in past years. In an interview posted on the ABC News website, located at http://www.abc.net.au/news/stories/2009/08/25/2665805.htm,

\"What we\'re trying to do is provide both opportunity and encouragement for those who are suffering unmanageable debt to obtain early advice and to sit down with their creditors to enter into debt agreements,\" he told ABC Radio\'s AM program.

For a full audio of the interview, click here

Showing tremendous foresight and leadership, the Attorney-General added: \"What we\'re trying to do is provide both opportunity and encouragement for those who are suffering unmanageable debt to obtain early advice and to sit down with their creditors to enter into debt agreements,\" he told ABC Radio\'s AM program.

\"The figures show that debt agreements provide to creditors about 76 cents in the dollar, whereas bankruptcies at the end of day provide only 1.6 cents in the dollar and that leaves, of course, the record against the debtor for forever and a day.\"

For information about Bankruptcy, you should refer to ITSA, the Insolvency and Trustee Service of Australia located at www.ITSA.gov.au